Muhammad Saleem

The volatility in gold prices is shaking up local markets in Pakistan, driving customers to explore alternative options. Rehan Ahmed, a gold jeweller, told WealthPk that the fluctuating prices of gold have made it difficult for traders and shop owners to set prices for their products. This fluctuation is now part and parcel of a broader trend influenced by the international market. He said that the volatility affects local businesses in many ways, and consumers’ reactions to price changes are hitting business significantly. He claimed that local jewelers and businesses are struggling a lot to keep their heads above water as they are unable to launch new ventures.

He noted that high prices of gold are reducing consumer’s spending, leading to lower sales volumes. Amid low sales, he questioned how businesses and traders can make ends meet, thus they will go for retrenchment and business closures. The jewelry market is particularly sensitive to price fluctuation, he claimed. Imran Ali, a gold artisan, said the price-hike is changing the gold markets with every passing day. He said that its volatility is pushing consumers toward alternatives, which is a bad omen for the local businessmen and artisans associated with this business. He said that it is crucial for the businesses to adapt to the rapidly changing market conditions.

While some speculate that gold jewelry will eventually lose its relevance, Ali disagreed, arguing that gold will remain an important asset in Pakistan’s economy. “I have spent three years in the Libyan gold market, where I have observed that people from Libya and other countries prefer to invest in gold,” he said. He explained that gold prices are closely tied to international issues; when global tensions rise or inflation increases, investors immediately flock to gold as a safe haven. He noted that due to such sudden investments, gold prices would register an upward trend, creating headaches for small traders, shopkeepers, and consumers.

He claimed that when the market sentiment improves or the dollar gains strength, prices can take a nosedive. Muhammad Umer, whose marriage is scheduled for February, shared with WealthPk that his family has categorically established the ground rules that neither side will use gold ornaments as gifts. He said that they have decided to put their gold jewelry funds toward starting their business. Displaying gold jewelry, he explained, serves no practical purpose, while saving that money can help him set up a business and provide an honorable source of income. He said that gold prices are so high, families planning weddings or special occasions are reconsidering their purchases.

Majority of the families are even opting for alternatives like artificial jewelry. He added that many consumers are feeling the heat of unbridled inflation, and sensing the situation some of the jewelers are ready to provide gold ornaments in exchange for property documents. He said they will hold onto the property documents for a set period of time, and will return them after receiving their payments along with profits.

Credit: INP-WealthPk